Healthcare stocks are one of the most stable assets for long-term investment. Even during periods of market turbulence, they tend to show steady growth thanks to the constant demand for medical services, pharmaceuticals, and innovative technologies.
The aging population in developed countries, escalating healthcare costs, advancements in digital health, extensive clinical trials, and healthcare innovations render the industry highly attractive for long-term investors. Government initiatives fostering the growth of pharmaceuticals and medical technologies act as a further catalyst. Experts highlight that the most promising medical companies offer a unique combination of stability and significant growth potential.
The article covers the following subjects:
Major Takeaways
- Health care stocks have historically been considered defensive stocks, demonstrating resilience even during times of crisis.
- The best health care stocks include pharmaceutical companies, medical device companies, and insurance companies.
- The list of top health care stocks includes companies focusing on innovations in diabetes treatment, cancer drugs, and cardiovascular developments.
- Medical companies are compelling investments because of their consistent growth and regular dividend income.
- FDA approval and analysis of the drug pipeline remain key factors determining share prices.
- Undervalued health care stocks are poised to soar by 40–50% in the medium term.
- Healthcare investments can be made by purchasing individual stocks or through ETFs.
Why Invest in Healthcare Stocks in 2025
Investor interest in health care stocks remains strong, given the growth of stock indices around the world. The healthcare sector performance is particularly stable and capable of maintaining profitability even in the face of global economic uncertainty. These stocks are supported by the broader economy, ongoing demand from hospitals, and reimbursement frameworks such as Medicare. Unlike cyclical industries, medical services, pharmaceuticals, and medical technologies are always in demand, making them safe-haven assets.
The main factors underpinning the sector’s expansion are an aging population and longer life expectancy, particularly in developed countries. These demographic trends are fueling stronger demand for pharmaceuticals, treatments, and medical services. At the same time, rising health care spending is reinforced by government initiatives aiming to enhance the accessibility of medicine and encourage investment in health care.
FDA-approved therapies, groundbreaking drug launches, and pivotal clinical trial results have emerged as powerful catalysts for growth across the medical investment landscape, with enablers like Thermo Fisher helping improve research quality and reduce the risk of development failure. Breakthroughs in cancer treatment and the expansion of the generics market strengthen companies’ positions in the global pharmaceutical arena. Meanwhile, the rapid evolution of digital health and the integration of AI-driven solutions are bolstering sustained long-term growth.
The best health care stocks offer a balance of stability, dividends, and growth prospects, making them a viable choice for investors.
Best Healthcare Stocks to Buy Now
The growing healthcare sector creates an array of opportunities for investors. Global pharmaceutical giants and medical technology stocks specializing in advanced equipment are in the spotlight. Some stocks are valued for their consistent dividends and stable business, while others stand out for their growth potential driven by innovation and major clinical trials. Below is the list of top healthcare stocks to buy.
Insulet Corporation (PODD)
Insulet is a leader in the medical technology sector, renowned for its innovative Omnipod insulin pumps that significantly enhance the lives of patients with diabetes. The diabetes drug and device market is consistently expanding, buoyed by the global increase in the number of patients.
Analysts highlight the company’s rapid revenue growth, investment in research and development, and integration of digital health care solutions. Insulet regularly ranks among the top medical stocks to buy and can be a good long-term investment. In 2025, the company’s shares gained 20%. Its market capitalization is estimated at $22 billion.
Gilead Sciences (GILD)
Gilead produces antiviral and oncology drugs. The company’s portfolio includes biotechnology-driven programs in cancer, successful treatments for AIDS, and cures for hepatitis C. Some of Gilead’s projects are in late-stage clinical trials, making the stock sensitive to news about FDA approvals. Experts believe that GILD can be a sound health care investment, as the company boasts significant upside potential and a stable business.
GILD is an enticing asset for both long-term investors and those seeking a mix of stability and innovation in the pharmaceutical industry. In 2025, the company’s shares appreciated by 38%, and its market capitalization reached $140 billion.
Pfizer (PFE)
Pfizer is one of the key drug manufacturers shaping the pharmaceutical market. It is known for its vaccines and drugs against infectious and cardiovascular diseases. Currently, PFE focuses on expanding its production of cardiology and oncology drugs. Consistent dividends are an additional advantage, making PFE attractive to investors following a buy-and-hold strategy. New drug patents and intensive work on developing generics are essential growth drivers.
Analysts consistently rank Pfizer among the top health care stocks to buy. For conservative investors, PFE remains a solid long-term holding. However, in 2025, the stock experienced a downturn, losing about 12% in value. The company’s market capitalization currently stands at around $136 billion.
Novo Nordisk (NVO)
Novo Nordisk is a Danish pharmaceutical leader that specializes in diabetes and obesity treatments. The approval of its flagship drug Wegovy by the FDA has significantly enhanced the company’s market capitalization. As global obesity and diabetes rates climb, the demand for Novo Nordisk’s products continues to surge. NVO is one of the top health care stocks, bolstered by the company’s dedication to research and development, as well as medical diagnostics and digital health innovation.
NVO has fallen over 80% from its mid-2024 peak of $143.50. The decline stems from lower profits, management changes, and mounting competition in the US pharmaceutical market. While the outlook may seem bleak, investors should remember that the best opportunities often come when prices are low.
UnitedHealth Group (UNH)
UnitedHealth Group is one of the largest US companies. It combines traditional insurance business with digital health care, ensuring steady growth of its customer base. The ongoing expansion of the healthcare sector in the US is beneficial to UnitedHealth, as it increases demand for insurance products. Until recently, UNH was considered one of the best health care stocks and demonstrated steady profit growth. However, in April 2025, the value of the asset plummeted by 25%.
The stock has now recovered from its decline and appears to be a promising health insurance stock to buy. The company’s market capitalization is approximately $310 billion.
Best Healthcare Stocks for Dividend Income
Investors focused on stable income usually prefer medical stocks that pay dividends consistently. When market volatility is intense, pharmaceutical and medical equipment companies become a safe haven, providing regular dividends.
The confluence of steady demand for drugs, medical services, and new technologies provides companies with sustainable cash flows. These securities not only protect capital but also generate above-average returns, making them a key component of a long-term portfolio.
Merck & Co (MRK)
Merck is one of the most reliable companies in the pharmaceutical market. Its business is based on developing innovative products, including the well-known cancer drug Keytruda. Thanks to stable cash flows, the company regularly pays dividends, making it attractive to long-term investors. The dividend yield of medical stocks usually surpasses the market average, and for MRK, the yield stands at 4.02%.
Johnson & Johnson (JNJ)
Johnson & Johnson is a leading pharmaceutical, consumer goods, and medical equipment company that continues to capitalize on innovation and manage growth through strong healthcare dividends. The company is known for its dividend history: it has increased shareholder payments for more than 60 consecutive years. The company’s strong portfolio in the pharmaceutical industry, stable business in the medical device segment, and consistent demand for its products make its securities one of the best health care stocks for dividend income.
Johnson & Johnson is expanding in medical diagnostics and digital healthcare, building a strong foundation for long-term growth. In 2025, JNJ delivered an impressive 44% increase and paid dividends with a 2.73% yield. With this performance, its shares remain a top choice for investors in the medical sector.
Undervalued Healthcare Stocks with Upside Potential
Not all health care stocks are trading at fair value. Many belong to companies with strong business models that face temporary challenges or are simply undervalued. These stocks are attractive because, as financial performance improves or positive news emerges, such as successful clinical trials, they may climb by 40–50%. Valuations can be influenced by patent cliff risks and evolving healthcare regulations, which investors weigh alongside growth drivers. Below are several undervalued health care stocks worth considering for investment.
Elevance Health (ELV)
Elevance Health is one of the largest US companies. Despite its strong financial results and broadening customer base, it is often valued lower than its major competitors based on valuation multiples. Although ELV securities are undervalued health care stocks, they have significant upside potential in the medium term. At the same time, the company’s business is well diversified. The company is actively developing healthcare digital services, which reinforces its position in the long term.
IQVIA Holdings (IQV)
IQVIA is a global leader in contract research and analytics for the pharmaceutical industry. Its work is deeply integrated with drug pipeline development, making it a key player in the development of new drugs. Despite its strong market position and solid fundamentals, IQVIA remains undervalued, offering investors an appealing buying opportunity.
The company benefits from the growing number of clinical trials and increased spending by pharmaceutical corporations and biotech firms on research. As estimates improve, the market may re-evaluate IQVIA’s potential, positively impacting its share price.
How to Invest in the Healthcare Sector
There are various ways to invest in stocks of healthcare companies, depending on the investor’s goals and strategy. The simplest method is to buy shares directly through a brokerage account. This approach allows you to select specific assets from a list of the top health care stocks and build your own portfolio. However, it requires fundamental analysis, pharmaceutical industry assessment, dividend policy evaluation, medical stock analysis, and an understanding of business development prospects.
For the majority of investors preferring ready-made solutions, exchange-traded funds (ETFs) such as the Health Care Select Sector SPDR Fund (XLV) are suitable. This is the largest and most popular health care ETF, featuring Pfizer, Johnson & Johnson, UnitedHealth Group, and other industry leaders. The fund is highly liquid and diversified within the sector.
Besides, consider the iShares US Healthcare ETF (IYH), which includes the largest companies in the US healthcare industry and offers exposure to pharmaceuticals, biotech, medical device companies, and health care stocks. This fund is well-suited for long-term investing and portfolio diversification.
Healthcare ETFs include a wide range of securities from pharmaceutical stocks, biotech stocks, medical device stocks, and hospital stocks. This type of investment provides diversification and helps mitigate the impact of declines in individual companies’ shares, offering exposure to key healthcare market trends.
When forming an investment portfolio, take into account factors such as FDA approval, successful clinical trials, new drug patents, and advances in precision medicine that can reshape competitive dynamics. These events can dramatically increase share prices. Moreover, monitor demographic trends, including population ageing and the number of chronic diseases. This data directly affects the demand for pharmaceutical products and insurance services.
Digital healthcare and telemedicine are also advancing rapidly, with new medical technologies being actively implemented. Investing in these areas can be highly profitable, while those seeking stable income may prefer dividend-paying health care stocks.
Investments in medical stocks can be both low-risk and high-risk, depending on the instruments chosen. It is important to allocate funds wisely between traditional pharmaceutical giants, insurance companies, and innovative biotechnology companies.
Conclusion
Health care stocks confirm their status as stable and promising assets. The sector’s growth is underpinned by global factors, including aging population trends, increased demand for healthcare services, and the expansion of government healthcare programs.
Investors should pay attention to Pfizer, Insulet, and Gilead, along with dividend stocks like Merck and Johnson & Johnson. Undervalued healthcare companies such as Elevance Health and IQVIA also present strong upside potential. For those who prefer a simpler approach or have limited investing experience, the Health Care Select Sector SPDR Fund (XLV) and the iShares US Healthcare ETF (IYH) are solid choices.
Therefore, top health care stocks and smart investments in medical companies can help you build a balanced portfolio.
Best Healthcare Stocks FAQs
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